Econ 201 D Winter 2019 Introduction to Macroeconomics Syllabus Instructor: Chujian Shao Office: Savery 319B Office hour: Monday and Wednesday 10:30-11:30 Class Hours: MTWThF 12:30-1:20, THO 135 Email: shaox103@uw.edu Our Course website: canvas.uw.edu Introduction Economists in general agree with the following proposition: economics is not a field of study of something particular. Rather, it is a set of tools and concepts that can be applied to understand a great number of phenomena in the economic and social sphere. We use the tools of the science of economics to study why things are and how they change when a relevant factor or force that shapes the phenomenon under study changes. As you read the assigned textbook for this course and attend the lectures and quiz sections, you will find the application of a set of thinking tools to a great number of interesting and important issues. Many of these issues part of the conventional wisdom believed by many are re-examined from an in-depth and insightful perspective. As the meaning and purpose of higher education goes, this should be truly a higher education experience! Macroeconomics is the study of economic behavior in aggregate how an economy grows and changes, and perhaps most importantly, how (if at all) we can manipulate it in order to increase overall welfare. Almost by definition, macro is the study of generating the greatest economic benefits for the greatest number by the most efficient available means. Along the way, we will consider theories of money, trade, unemployment, business cycles and growth. Learning Goals 1. Fundamental Knowledge Understand and be able to use macroeconomic terminology Explain how the highest-valued alternative foregone is the opportunity cost of what is chosen Explain who determines the growth of production and prices in the economy Analyze the causes of growth and recession. Analyze how government policies and different institutional arrangements affect the allocation of resources in an economy 2. Application Use macroeconomic principles to understand and explain economic events and other social phenomena Critique the economic content of articles or presentations 1
Appreciate the usefulness of economic reasoning in social decision making Textbook Krugman and Wells, Macroeconomics, 5th Edition, with Sapling. You can purchase it at the University Bookstore, which offers both a physical copy and an e-book for slightly cheaper. Topics Covered 1. Introduction to economics and the concepts of scarcity and opportunity cost including some examples and applications. Chapters 1 and 2. 2. Supply and Demand, the basic models of markets are trade. Chapter 3. 3. Introduction to Macroeconomics, history of macroeconomics as a discipline. Chapter 6. 4. Macroeconomic Data. What do we look at when talking about the macroeconomy? We will look at GDP, output, income, the price level, and inflation. Chapters 7 and 8. 5. Long Run Growth. We will start thinking about what determines output, starting with the long run. We will learn about the role of capital, human capital, infrastructure and institutions. Chapter 9. 6. Savings and Investment. What determines how much people save, and firms invest? We will look at the function of capital markets and financial markets. Chapter 10. 7. Income and Expenditure. What determines how much people spend, and how do firms know to produce enough to meet their demand? We will learn the Keynesian Cross, an important model of income and spending, and Multiplier Process of spending. Chapter 11. 8. We will then add the price level to the story of income and expenditure, completing our theory of what determines economic output and prices. This model of Aggregate Demand and Supply will be our main tool to analyze the macroeconomy. Chapter 12. 9. Fiscal Policy: How can the government respond to recession? What does the government do with the taxes and spending it carries out? Chapter 13. 10. Money and Banking. We will show that money is a very special financial asset, and that banking plays a very special role in money creation. Chapter 14. 11. Monetary Policy is carried out by the Federal Reserve; we will discuss the history and role of the Fed, and how they can respond to recession using Monetary Policy. Chapter 16. 12. We will conclude by analyzing an important episode of Macroeconomic history, the Disinflation of the early 80s, and talk about the limits of using Monetary Policy to promote growth. Chapter 16. 13. We ll talk about the most recent recession and the important of financial crises. Chapter 17. 14. We will talk about some key issues in international macroeconomics: the determinants of a country s balance of payments, the factors affecting exchange rates, the different forms of exchange rate policy. Chapter 18. 2
Teaching and Assignment Schedule Below is a tentative schedule to help you plan ahead and think about course readings. More than likely the dates when we cover material will shift as we get behind or ahead, so I ll update you as these things change. On every Friday s meeting, we will review what we learn in a week or do a midterm review and discuss some worksheet problems. You can find all worksheets on Canvas and solve them by yourself before Friday s meeting. Week Date Lecture Assignment and exam Week 1 1/7-1/11 Introduction, Practice Sapling homework 1 Sun 1/13 (Chap1, 2) Chapter 1, 2, 3 Week 2 1/14-1/18 Chapter 6, 7 Sapling homework 2 Sun 1/20 (Chap 3, 6) 1/20 Week 3 1/21-25 Monday: Martin Luther King Day Chapter 8 Midterm review Handwritten homework 1 Fri 1/25 (Chap 2, 3, 6, 7, 8) Sapling homework 3 Sun 1/27 (Chap 7, 8) 1/27 Week 4 1/28-2/1 Midterm1 Midterm 1 Tue 1/29 (Chap 2, 3, 6, 7, 8) 2/3 Chapter 9 Sapling homework 4 Sun 2/3 (Chap 9) Week 5 2/4-2/8 Chapter 10, 11 Sapling homework 5 Sun 2/10 (Chap 10, 11) 2/10 Week 6 2/11-2/15 2/17 Chapter 12 Handwritten homework 2 Fri 2/15 (Chap 9, 10, 11, 12) Midterm review Week 7 2/18-2/22 Monday: Presidents Day 2/24 Midterm 2 Chapter 13 Sapling homework 6 Sun 2/17 (Chap 12) Midterm 2 Tue 2/19 (Chap 9, 10, 11, 12) Sapling homework 7 Sun 2/24 (Chap 13) Week 8 2/25-3/1 Chapter 14, 15 Handwritten homework 3 Fri 3/1 (Chap 13, 14, 15) 3/3 Sapling homework 8 Sun 3/3 (Chap 14, 15) Week 9 3/4-3/8 Chapter 16, 17 Sapling homework 9 Sun 3/10 (Chap 16, 17) 3/10 Week 10 3/11-3/15 3/17 Chapter 18 Final Review Handwritten homework 4 Fri 3/15 (Chap 16, 17, 18) Sapling homework 10 Sun 3/17(Chapter 18) 3
Grading The grading policy of the Department of Economics sets the upper boundary for the Median grade in principles of economics courses at 3.1. We will maintain a median grade for this course in the 2.8-3.1 range. If the median grade for the course happens to be outside of 2.8-3.1 range on the preliminary grade scale, we will adjust the grade scale accordingly. Sapling Homework...10% Handwritten Homework.15% Midterm 1...20% Midterm 2...20% Final Exam...35% Exam There will be three exams, two Midterm exams and one Final Exam. The final exam is cumulative. All books, papers, notebooks, etc., must be placed inside your backpack or other type of bag, which must be securely and fully closed. You will need a calculator for some of the questions on your tests. Please bring a simple 4-function or a scientific calculator to all your exams. Graphing calculators are not allowed in any of the exams in this course. We will require both the phone number and address of the doctor/clinic in order to verify the authenticity of the documentation you provide. For the Midterms, we will write a make-up again with documentation from a clinic or a doctor. There is no make up for the Final Exam. If you miss the Final Exam you will earn an incomplete grade for this course. Midterm 1: Tue 1/29 Midterm 2: Tue 2/19 Final exam: Thu 3/21 Handwritten Homework There will be four long answer type homework assignments. These assignments can help you practice some analytical problems with detail explanation, mathematical methods and graphing. I will post them on Canvas a week earlier than the due date. Only hard copy is acceptable so you need to submit your homework assignments in class. No late submission is acceptable. Sapling Homework There will be a set of questions assigned in Sapling. These will be assigned approximately weekly and will be automatically graded in Sapling. The questions in this type of assignment check your understanding of the concepts and on a few occasions ask you to analyze a problem using the concepts you have learned. 4
How to Study Effectively Read the relevant parts of chapter(s) carefully before each lecture. Try to get a good idea of both the questions asked and the approach (the concept and the reasoning process) to addressing the questions in the textbook. Attendance is recommended. Active class participation can induce your learning interest and help you have a better understanding of each concept. We will do some practice questions to prepare for your exams and quizzes. Take notes during class, but it is not necessary to copy every slide. The slides will be posted online. You are welcome to ask clarifying questions, present points of debate, etc. during class. After the lecture, attempt the problems and make sure you fully write down the answer to each question using the relevant concepts you have learned. In order to successfully answer a question, ask yourself the following: i) what does the question want me to do? ii) What relevant information does the question provide? iii) How do I go from the given information to the answer? You want to use the concepts and tools for thinking that you have learned to answer the question. Joining a study group with your classmates can help you think deeply for the relevant concepts and problems. Available Resources The Economics Undergraduate Union provides drop-in tutors at Savery 328. For more information, see http://depts.washington.edu/ecnboard/eub-tutoring/ The CLUE evening study sessions provide extra educational support for students. The CLUE schedule online is at: http://depts.washington.edu/clue/index.php Academic Integrity Academic integrity is the cornerstone of the Department s rules for student conduct and evaluation of student learning. Students accused of academic misconduct will be referred directly to the Office of Community Standards and Student Conduct for disciplinary action pursuant to the Student Conduct Code and, if found guilty, will be subject to sanctions. Sanctions range from a disciplinary warning, to academic probation, to immediate dismissal for the Department and the University, depending on the seriousness of the misconduct. Dismissal can be, and has been, applied even for first offenses. Moreover, a grade of zero can be assigned by the instructor for the course. Behavior that constitutes academic misconduct includes but is not limited to cheating on exams or quizzes (copying answers from others, using unauthorized materials, a student not taking their own quiz/exam, etc.), copying homework answers, plagiarism. You may read more at http://www.washington.edu/cssc/facultystaff/academic-misconduct/ 5